Tesla’s CEO Musk delivers the first cars from the new German gig factory

GRUENHEIDE, Germany, March 22 (Reuters) – Elon Musk was in charge of delivering Tesla’s first German-made cars to customers at the carmaker’s 5 billion euro ($ 5.5 billion) Gruenheide plant on Tuesday, marking the start of the US company’s first European hub. and the largest investment in Germany’s car industry in recent history.

The 30 customers and their families received their vehicles on the spot through a glittering, neon-lit Tesla exit that swarmed around when Musk arrived.

“This is a great day for the factory,” Musk said, describing it as “another step towards a sustainable future”.

Chancellor Olaf Scholz, who was also present, praised the facility as a sign of progress and the future of the automotive industry.

Not everyone supports Tesla, but environmental groups gather outside the plant on Tuesday with banners, pots and pans to express their concerns, ranging from the plant’s high water consumption to the trees felled to build it. Read more

Musk had hoped to begin production from the factory eight months ago, but local authorities in Germany said it had still been completed relatively quickly despite delays in licensing.

Tesla received the last green light from local authorities on March 4 to begin production, provided it met several conditions covering issues such as water consumption and air pollution control.

“Some people did not trust that Germany could do this,” Regional Finance Minister Joerg Steinbach told rbb radio, adding, “We showed the world.” Read more

RUN WITH VW

The selected Tesla customers will receive the Model Y Performance configuration, a vehicle that costs 63,990 euros ($ 70,491.38) with a range of 514 km (320 miles), the company said, adding that new orders from the factory could be delivered from April.

Tesla said about 3,500 of the factory’s expected 12,000 workers have been hired so far.

The license delay meant that Tesla had to service previous European orders from its Shanghai factory, which increased costs.

“Makes a huge difference to capital efficiency to locate production within a continent,” Musk tweeted.

At full capacity, the factory will produce 500,000 cars a year, more than the 450,000 battery-powered vehicles that German rival Volkswagen (VOWG_p.DE) sold globally in 2021.

It will also generate 50 gigawatt-hours (GWh) of battery power, surpassing all other factories in Germany.

So far, Volkswagen is still on the inside of the race to electrify Europe’s fleet with a market share of 25% to Tesla’s 13%. Musk has said it will take longer to increase production than the two years it took to build the plant. Read more

JPMorgan predicted that Gruenheide would produce around 54,000 cars in 2022, rising to 280,000 in 2023 and 500,000 in 2025.

Volkswagen, which has already received 95,000 EV orders in Europe this year, is planning a new € 2 billion EV plant along with its Wolfsburg plant and six battery plants across Europe.

But its timeline is lagging behind Teslas, with the power plant opening in 2026 and the first battery plant in 2023.

($ 1 = 0.9086 euros)

Reporting by Victoria Waldersee, Nadine Schimroszik; Edited by Jan Harvey, Edmund Blair, Alexander Smith and Alex Richardson

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